Morgan Stanley auto analyst Adam Jonas has established himself as a Tesla bull. In May he said all electric vehicles were on life support save those of the Palo Alto-based automaker. Then in June, he recounted how a BMW engineer had told him Tesla had "reinvigorated the spirit of automobile innovation."

Today, he again makes the case that Tesla is the only automaker you should care about.

But first he summarizes the state of the industry, which has seen — on the surface at least — impressive sales growth in 2014. But Jonas isn't buying it.

"The US auto cycle has clearly moved from a 'need to buy,' to an 'I just want to buy' type of consumer mindset," he writes. "Forgive our contrarian instincts if this alignment of factors makes us want to head in the opposite direction."

Why is this problematic? Jonas has previously written that while dealers are banking more deals, they're doing so on overly generous terms. Today he reiterates this:

The 2 most unsettling (and underreported) trends in the US cycle include extended loan maturities and inflated residual values. The resulting low monthly payments create the image of affordability, enabling the purchase of bigger, higher priced cars. The monthly data shows rising ATPs, suggesting improved pricing, when precisely the opposite is occurring. Consumers buy cars like they buy houses - lower payment, bigger car. There is a dark side to all this.

He also argues that traditional automakers have become heavily dependent on growth in China, where there is a heavy risk of getting undercut on prices. And many are now finding themselves in a spending "arms race" that will see capex climb inexorably, putting pressure on those who invest efficiently.

As a result, he likes none of the big automakers. Who does he like? Tesla, obviously. But also, companies that are going to lead the driverless-car revolution:

The race for autonomous cars creates some of the most exciting supplier investment opportunities and pair trades in a generation. The logical conclusion of connected vehicles is a future that liberates human beings from the boredom, the burden and the dangers of driving. We see great amounts of wealth being created and unevenly redistributed across the supply base as the role of software engulfs the value of the vehicle. [Delphi] (MS Best Idea), [TRW Automotive] and [BorgWarner] are our key secular picks. We see [Tesla] both as an autonomous hegemony-setter and the only car manufacturer with meaningful upside. [Magna International] (top pick) and [Lear] offer more cyclical upside with optimization of cap structure.